AFCR seeks $18M…To buy Dalny Mine …Fast track Pickstone-Peerless Gold Project

gold
Mernat Mafirakurewa Business Editor—

ALTERNATIVE Investment Market listed entity, African Consolidated Resources (AFCR), has announced plans to raise $18 million for the purchase of Dalny Mine and the development of its flagship Pickstone-Peerless gold project. In a trading update yesterday, AFCR said it had signed a conditional agreement with Falcon Gold Zimbabwe to purchase Dalny located near Kadoma, which is proximal to both its flagship Pickstone-Peerless Gold Project and its Gadzema Gold Project, for a net cost of $8,5 million.

The company intends to raise approximately $18 million through a mixture of debt and equity in order to bring Pickstone into production, finance the acquisition of Dalny and support general corporate purposes.

AFCR said Dalny has an operational processing plant and ancillary infrastructure, which would provide a central processing plant to treat ore from Pickstone, thus fast tracking gold production.

“This is a potential game-changer for AFCR with considerable blue-sky opportunities,” said chief executive officer Roy Pitchford.
“We have already identified a high grade, low cost gold resource at Pickstone and I am encouraged by our low-risk profile due to the low cost of production and conservative mining methods.

“Subject to financing and completion, this acquisition will further enhance the already attractive economics of Pickstone, and strengthen our existing platform so that AFCR can play a meaningful role in the resurgence of the Zimbabwean gold sector.

“I look forward to providing further updates on this exciting opportunity shortly.”
ACFR said the acquisition of Dalny presents a unique opportunity to acquire established infrastructure to fast track production and reduce capital expenditure.

It said prior to the proposed purchase of Dalny, AFCR has been provided with an outline indigenisation proposal by an appropriate indigenous entity which is acceptable to the company, the effect of which has been taken into account in the company Internal Financial Model.

Dalny Mine was put into care and maintenance by Falcon in August last year as a result of operational and labour issues.
In the year to September 30, 2013, the Dalny division of Falcon (the division) incurred a loss before tax of $11,3 million, but since the shutdown of the mine, its operating losses have been significantly reduced.

The company said it did not consider that the past results of the division were representative of future operations as AFCR was not currently proposing to reopen Dalny Mine itself in the near to medium term, but use the existing processing plant and mining equipment to process ore from AFCR’s existing Pickstone mine.

Under the Mining Plan, initial works at Pickstone and Dalny to prepare for mining and processing are projected to  take two months from completion of funding, with mining starting in the third month, processing in the fourth month and gold production in the fifth.

You Might Also Like

Comments